Today, the former executive of Bradenton’s Coast Bank will testify in one of the case’s final court hearings before his sentencing in January. Also scheduled to testify at the evidentiary hearing in Tampa will be Coon’s co-conspirator in the loan skimming scheme, John Robert Miller, president of American Mortgage Link, and Jesse Battle, president of Construction Compliance Inc.

The evidentiary hearing will aim to resolve whether restitution is owed to Coast Bank borrowers as a result of Coon conspiring with Miller to charge clients an extra 1 percent fee.

It appears Sarasota attorney Alan Tannenbaum may be fighting an uphill battle to prove Coast Bank borrowers are entitled to restitution.

Help us deliver journalism that makes a difference in our community.

Our journalism takes a lot of time, effort, and hard work to produce. If you read and enjoy our journalism, please consider subscribing today.

In court documents released Dec. 1, the government stated the borrowers aren’t entitled to restitution because they didn’t suffer financial harm.

“The fact that the loan origination fee was increased by 1 percent, pursuant to Coon and Miller’s conspiratorial agreement, did not affect the purchase price of the (property) and, therefore, the amounts loaned to the borrowers by Coast Bank,” stated Rachelle Desvaux Bedke, assistant U.S. attorney, in court documents.

Tannenbaum says the government’s logic on this issue is problematic because the government is assuming a home was built for all the 152 investors he is representing.

“For more than 80 percent of these loans, no home was delivered,” Tannenbaum said. “The closing costs, including the mortgage brokerage fee which Phil Coon has admitted skimming, the lot purchase price determined by the builder and a construction draw were paid from borrowers’ loan accounts at closing and then in most cases the money disappeared with the borrowers holding the bag for what was disbursed.”

James Felman, a Tampa attorney representing Coon, however will argue today that the sellers, not the borrowers, paid additional closing costs.

Felman said the court can easily determine this from the closing statements that will be viewed as evidence today.

“You look at the document and it says that the seller’s responsible for closing costs,” Felman said. “I don’t think there is a shred of evidence to show that anyone other than the seller paid a nickel of the closing costs.”

However, Tannenbaum says builders’ claim they paid closing costs was deceptive and not fulfilled because the money used for closing costs were taken from Coast Bank borrowers’ loan accounts.

“Coon’s convoluted argument is that despite the closing costs having been funded from the homebuyers’ Coast Bank loans, because the closing costs were included in the fixed price of the home this somehow translates into the builders having paid the closing costs,” Tannenbaum said. “It makes no sense where no home was delivered, as is the case with most of these loans.”